The Equal Protection Clause of the Fourteenth Amendment generally acts as a legal limit on the permissible bounds of government action. Accordingly, public universities and other government entities are constitutionally prohibited from engaging in acts that violate equal protection of the laws. The Supreme Court recently reinforced this point when it ruled, in two related cases, that public universities may consider the race of applicants when making admissions decisions, so long as an applicant's race does not amount to a deciding factor when granting admission. By its very terms, the constitutional limitation imposed by the Equal Protection Clause only directly applies to government entities, not private ones. Private entities, however, are subject to other legal limits on the use of race as a factor that are not themselves constitutional limits but approximate to them. One of these pseudo-constitutional legal limits for private actors—at least those that are tax-exempt pursuant to section 501(c)(3) of the Internal Revenue Code—is the tax law's public policy limitation. Hence, the Supreme Court has ruled that a private university that discriminates against black people is not entitled to section 501(c)(3) tax-exempt status. This Article examines the impact of the Supreme Court's recent decisions concerning the permissible use of race by public universities on the scope of the public policy prohibition against racial preferences by private tax-exempt entities.
David A. Brennen, Race Conscious Affirmative Action by Tax Exempt 501(c)(3) Corporations After Grutter and Gratz, 77 St. John's L. Rev. 711 (2003).